Business News 13.9.2016 02:49 pm

Kumba faces further R1bn tax bill for Sishen

Supplied photo

Supplied photo

Kumba says the field audit for the 2012 and 2013 tax years is in progress.

Kumba Iron Ore Limited said on Tuesday it has received notification from Sars of a potential additional tax bill of R1 billion for its 73.6 percent-owned subsidiary, Sishen Iron Ore Company (SIOC).

Kumba, a member of the Anglo American group, said Sishen had cooperated fully with Sars during the audit but disagreed with the findings.

This comes after notification in February this year of a liability of R5.5 billion after an assessment by Sars of the tax years 2006 to 2010.

“Kumba has now received a similar letter of findings from Sars in relation to the 2011 tax year, indicating potential adjustments to the company’s taxable income which would result in an additional tax liability of approximately R1 billion, excluding any potential interest and penalties, should Kumba ultimately be assessed on this basis,” the statement to the market read.

It added SIOC had objected to the assessment and applied for the suspension of payment, and was awaiting a response from the commissioner of Sars on both matters.

Kumba, a member of the Anglo American group, said Sishen had cooperated fully with Sars during the audit but disagreed with the findings.

Chief executive Themba Mkhwanazi said Kumba and its subsidiaries believed all taxes had been paid, and that they complied with all applicable tax laws in all jurisdictions in which they operated.

He added: “Kumba generates substantial value for all its stakeholders and is fully committed to the transformation of the South African mining industry and to the wider societal and economic benefits that we bring.”

Mkhwanazi noted in 2015 alone, a year during which the iron ore price had fallen sharply, “our business contributed R900 million in corporate taxes and mineral royalties, R4.7 billion in salaries and wages, R15.2 billion in local procurement, R6.8 billion of capital reinvested in the business and R174 million in social investment in health, housing, education and small business development”.

Kumba said the field audit for the 2012 and 2013 tax years was in progress and shareholders would be updated as appropriate.

– African News Agency (ANA)

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